What are considered "selling costs" in retail?

Selling costs in retail encompass the expenses directly linked to the process of selling products to consumers. This includes labor costs such as wages for sales staff, commissions, and other related expenses incurred while interacting with customers and facilitating the sale. The rationale behind identifying these elements as selling costs is that they are necessary to convert inventory into revenue, as they directly contribute to the sales transaction itself.

While marketing and advertising expenses are essential components of selling, they fall under promotional costs rather than immediate selling costs. Costs associated with purchasing inventory relate to acquisition expenditures and not directly to the selling process. Shipping fees, while also an integral part of getting products to customers, typically align more with logistics or operational costs rather than specifically defining the act of selling. This context highlights why labor and direct selling expenses are classified distinctly as selling costs.